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Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 19: ICA transfer to master fund

You could also call this:

“Crediting a master fund for transferred expenditure”

If you’re an ICA company that’s a master fund, you can get an imputation credit when you transfer expenditure. This happens under sections DV 5 to DV 7, which are about transferring expenditure to master funds.

To work out how much credit you get, you use a simple maths formula. You multiply the amount of expenditure you transferred by the tax rate. The tax rate you use is the basic income tax rate found in schedule 1, part A, clause 2.

This credit is listed in a special table called O1: imputation credits. It’s in row 17, which is about transfers to master funds.

The date of the credit is important too. It’s the last day of the tax year that matches the income year when you deduct the expenditure.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518736.

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OB 18: ICA transfer from ASC account, or

“Transfer money from available subscribed capital to imputation credit account”

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OB 19B: ICA transfer to loss-using group company, or

“Transfer of imputation credits to a company using another company's tax losses”

Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 19ICA transfer to master fund

  1. An ICA company that is a master fund has an imputation credit for the transfer of an amount of expenditure under sections DV 5 to DV 7 (which relate to the transfer of expenditure to master funds). The amount is calculated using the formula—

    expenditure transferred × tax rate.

    Where:

    • In the formula,—

    • expenditure transferred is the amount of expenditure transferred under sections DV 5 to DV 7 (which relate to the expenditure of investment funds) to the company as a master fund:
      1. tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits).

        1. The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 17 (transfer to master fund).

        2. The credit date is the last day of the tax year corresponding to the income year in which the expenditure is deducted.

        Compare
        Notes
        • Section OB 19(1): amended (with effect on 1 April 2008), on , by section 387(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
        • Section OB 19(2)(b): amended, on , by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
        • Section OB 19 list of defined terms basic rate: repealed, on , by section 243 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).